Marygold Companies, Inc.

Previous wording

In addition to historical financial information, the following MD&A contains forward-looking statements that involve certain risks, uncertainties and assumptions. See “Special Note Regarding Forward-Looking Statements.” Our results of operations and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” in Part II of this Report and “Item 1A. Risk Factors” in our Form 10-K for the year ended June 30, 2024.

Current wording

In addition to historical financial information, the following MD&A contains forward-looking statements that involve certain risks, uncertainties and assumptions. See “Special Note Regarding Forward-Looking Statements.” Our results of operations and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” in Part II of this Report and “Item 1A. Risk Factors” in our Form 10-K for the year ended June 30, 2024, and in our Quarterly Report on Form 10-Q for the quarter ended December 31, 2024.

Previous wording

The Marygold Companies, Inc., a Nevada corporation (together with its subsidiaries, “we,” “us,” “our,” “Company,” or “The Marygold Companies”), is a holding company which operates through its wholly owned subsidiaries engaged in certain diverse business activities listed below but with a primary focus on the fund management and financial services industries in the U.S. and U.K.:

Current wording

The Marygold Companies, Inc., a Nevada corporation (together with its subsidiaries, “we,” “us,” “our,” “Company,” or “The Marygold Companies”), is a diversified global holding company that operates through its wholly-owned subsidiaries with a primary focus on the fund management and financial services industries in the United States (“US”) and United Kingdom (“UK”), including the emerging Fintech space. The operations of the Company’s wholly-owned subsidiaries are summarized below:

Previous wording

Revenue decreased by $0.5 million or 5% for the quarter ended December 31, 2024 as a result of lower revenue in our fund management segment of $0.3 million and in our food products segment of $0.2 million. The decrease in fund management revenue was driven by a decrease in average Assets Under Management (“AUM”). Average AUM for the quarter ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the quarter ended December 31, 2023. The decrease in average AUM in the quarter ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with geopolitical and economic uncertainty. The decrease in food products revenue was due to was due to a temporary cancellation of certain product categories sold to national grocery chains pending price increase acceptance.

Current wording

Revenue decreased by $0.9 million or 11% for the quarter ended March 31, 2025 as a result of a decrease in revenue from our U.S. fund management segment of $0.3 million (or 7%), a decrease in revenue from our food products segment of $0.3 million (or 18%), and a decrease in our beauty products segment of $0.2 million (or 25%). The decrease in U.S. fund management revenue was driven by a decrease in average Assets Under Management (“AUM”). Average AUM for the quarter ended March 31, 2025 was $2.6 billion compared to $3.0 billion for the quarter ended March 31, 2024. The decrease in average AUM in the quarter ended March 31, 2025 was due to commodity price fluctuations, along with geopolitical and economic uncertainty. The decrease in food products revenue was due to a temporary cancellation of certain product categories sold to national grocery chains pending price increase acceptance as well as the timing of job completions. The decrease in beauty products revenue was driven by the discontinuation of sales to domestic distributors who sold our products specifically on Amazon.

Previous wording

Gross profit decreased by $0.4 million or 7%, driven by the reduced revenue from the lower average AUM as described above.

Current wording

Gross profit decreased by $0.3 million or 5%, driven by the reduced revenue from the lower average AUM as described above.

Previous wording

USCF Investments earns monthly management and advisory fees based on an investment management or advisory agreement with each Fund. The management fees are determined on the basis of a contractual basis point management fee multiplied by the average AUM over the given period. Average AUM for the quarter ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the quarter ended December 31, 2023. As a result of lower average AUM for the current quarter when compared to the quarter ended December 31, 2023, revenue decreased by $0.3 million or 6%. The decrease in average AUM in the quarter ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with the impact of geopolitical and economic uncertainty.

Current wording

USCF Investments earns monthly management and advisory fees based on an investment management or advisory agreement with each Fund. The management fees are determined on the basis of a contractual basis point management fee multiplied by the average AUM over the given period. Average AUM for the quarter ended March 31, 2025 was $2.6 billion compared to $3.0 billion for the quarter ended March 31, 2024. As a result of lower average AUM for the current quarter when compared to the quarter ended March 31, 2024, revenue decreased by $0.3 million or 7%. The decrease in average AUM in the quarter ended March 31, 2025 was due to commodity price fluctuations, along with the impact of geopolitical and economic uncertainty.

Previous wording

Gourmet Foods has two distinct operating divisions: 1) a commercial-scale bakery producing iconic Kiwi pies and sausage rolls and 2) a digital printing business (Printstock Products Limited) which prints specialty food wrappers. Total food products revenue decreased by $0.2 million or 12% for the quarter ended December 31, 2024 as compared to 2023, the result of decreases at both our printing business and our bakery business. The decrease of $0.1 million or 8% in our printing business was due to the timing of job completion and invoicing. The decrease of $0.2 million or 15% in our bakery business was due to a temporary cancellation of certain product categories sold to national grocery chains pending price increase acceptance.

Current wording

Gourmet Foods has two distinct operating divisions: 1) a commercial-scale bakery producing iconic Kiwi pies and sausage rolls and 2) a digital printing business (Printstock Products Limited) which prints specialty food wrappers. Total food products revenue decreased by $0.3 million or 18% for the quarter ended March 31, 2025 as compared to 2024, the result of decreases at both our printing business and our bakery business. The decrease of $0.1 million or 16% in our printing business was due to the timing of job completion and invoicing. The decrease of $0.1 million or 9% in our bakery business was due to a temporary cancellation of certain product categories sold to national grocery chains pending price increase acceptance. The remaining $0.1 million decrease is attributed to negative changes in currency translation for the current quarter when compared to the prior year comparable quarter.

Previous wording

Original Sprout derives its revenues from the sale of proprietary hair and skin care products marketed to domestic and international distributors, grocery stores, hair salons and direct-to-consumers via online platforms. Revenue was consistent at $0.8 million for both quarters ended December 31, 2024 and 2023.

Current wording

Original Sprout derives its revenues from the sale of proprietary hair and skin care products marketed to domestic and international distributors, grocery stores, hair salons and direct-to-consumers via online platforms. Revenue decreased by $0.2 million or 25% driven by the discontinuation of sales to domestic distributors who sold Original Sprout products specifically on Amazon.

Previous wording

Operating loss decreased by less than $0.1 million or 48% for the quarter ended December 31, 2024 as compared to 2023 as a result of the elimination of amortization expense associated with the impairment of intangible assets at the end of the prior fiscal year.

Current wording

Operating loss decreased by less than $0.1 million or 34% for the quarter ended March 31, 2025 as compared to 2024 as a result of the elimination of amortization expense associated with the impairment of intangible assets at the end of the prior fiscal year.

Previous wording

Brigadier earns revenue from recurring alarm monitoring fees charged to residential customers, and from hardware sales and installations of access controls for commercial customers. Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the quarter ended December 31, 2024 as compared to 2023. Revenue increased but was offset by an increase in cost of goods sold, producing a relatively flat operating income. The larger commercial accounts generate more revenue and profits but take longer to complete, thus may produce spikes or declines in revenue and profits for specific reporting periods. As the residential consumer segment of the industry becomes more complex due to the bundling of services, including alarm monitoring, offered by larger telecom companies, we expect to focus even more heavily on the commercial and public facilities customers in the coming years.

Current wording

Brigadier earns revenue from two primary sources. The company sells to residential customers alarm monitoring contracts and installations on behalf of a telecom provider for whom it is a dealer. These contracts result in recurring monthly residuals comprising approximately 50% of revenues. Remaining revenues are derived from sales and installation of access controls, alarm, video, and fire panel alarm monitoring hardware to commercial businesses and publicly owned facilities. Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the quarter ended March 31, 2025 as compared to 2024. Revenue decreased by less than $0.1 million or 13% and operating income was relatively flat at $0.1 million. The larger commercial accounts generate more revenue and profits but take longer to complete, thus may produce spikes or declines in revenue and profits for specific reporting periods. As the residential consumer segment of the industry becomes more complex due to the bundling of services, including alarm monitoring, offered by larger telecom companies, we expect to focus even more heavily on the commercial and public facilities customers in the coming years.

Previous wording

Marygold US has developed and launched a mobile banking fintech app which is expected to earn revenue in the form of management fees based on a percentage of the amount of account holder funds are invested in various curated ETF portfolios offered on the app (“Money Pools”), and from transaction fees when account holders use our debit card. The app was soft-launched in June 2023 as a proof of concept. Since that time, the app has earned only de minimis revenues. Operating costs are comprised of development team salaries and expenses, fees paid to third party vendors, fees paid to our sponsoring bank, marketing costs and staff salaries. For the quarter ended December 31, 2024, Marygold US incurred an operating loss of $1.5 million as compared with an operating loss of $1.4 million for the quarter ended December 31, 2023. These losses and negative cash flows are expected to continue for the coming fiscal year.

Current wording

Marygold US developed and launched a mobile banking fintech app which earned revenue in the form of management fees based on a percentage of the amount of account holder funds invested in various curated ETF portfolios offered on the app (“Money Pools”), and from transaction fees when account holders used a debit card. The app was soft-launched in June 2023 as a proof of concept. Since that time, the app has earned only de minimis revenues. As a result, the Company has decided to pause the offering and operating the app in the US and focus on launching the app in the UK instead. Operating costs are comprised of development team salaries and expenses, fees paid to third party vendors, fees paid to our sponsoring bank, marketing costs and staff salaries. For the quarter ended March 31, 2025, Marygold US incurred an operating loss of $1.3 million as compared with an operating loss of $1.4 million for the quarter ended March 31, 2024. As a result of our decision to pause the offering and operating the app in the US, the losses and negative cash flows from Marygold US are expected to be significantly reduced for the remainder of this fiscal year.

Previous wording

Our total U.K. Financial Services revenue, derived entirely from Marygold UK, for the quarter ended December 31, 2024, increased by $0.1 million or 67% to $0.2 million as compared to $0.1 million for the quarter ended December 31, 2023. The increase was driven by the incremental revenue of $0.1 million from Step-By-Step, which was acquired in April 2024. Operating loss increased by $0.2 million due to increased costs incurred in connection with the adoption and implementation of the Marygold mobile Fintech app for the U.K. market. The consolidated operating loss for financial services was $1.7 million for the current quarter as compared to a loss of $1.5 million for the quarter ended December 31, 2023.

Current wording

Our total U.K. Financial Services revenue, derived entirely from Marygold UK, for the quarter ended March 31, 2025, increased by $0.1 million or 70% to $0.2 million as compared to $0.1 million for the quarter ended March 31, 2024. The increase was driven by the incremental revenue of $0.1 million from Step-By-Step, which was acquired in April 2024. Operating loss increased by $0.2 million due to increased costs incurred in connection with the adoption and implementation of the Marygold mobile Fintech app for the U.K. market. The consolidated operating loss for financial services was $1.5 million for the current quarter as compared to a loss of $1.4 million for the quarter ended March 31, 2024.

Previous wording

The Marygold Companies as a holding company has no significant revenue, however, it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE American listing fees and expenses, expenses related to compliance with its SEC periodic reporting requirements, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters increased by $0.1 million, or 10%, for the quarter ended December 31, 2024 as compared to same period in 2023. The increased loss was driven by higher stock-based compensation expenses from additional equity grants during the quarter ended December 31, 2024.

Current wording

The Marygold Companies as a holding company has no significant revenue, however, it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE American listing fees and expenses, expenses related to compliance with its SEC periodic reporting requirements, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters was relatively flat at $0.8 million for the quarter ended March 31, 2025 as compared to same period in 2024.

Previous wording

Operating expenses increased by $1.1 million or 8% as a result of the following. General and administrative expenses increased by $0.4 million or 8% driven by increased costs associated with our Fintech app development including additional software and security infrastructure in the UK. Salaries and compensation increased by $0.5 million or 9% compared to the six months ended December 31, 2023 driven by increased stock-based compensation expenses plus increased compensation at USCF. Fund operations increased by $0.5 million or 21% driven by increased costs associated with managing more funds. Partially offsetting these increased operating expenses was a decrease in marketing and advertising of $0.3 million or 17% as a result of prior year increased spending for new products at Original Sprout as well as from the Fintech app and new fund launches.

Current wording

Operating expenses increased by $0.9 million or 4% as a result of the following. General and administrative expenses increased by $0.4 million or 6% driven by increased costs associated with our Fintech app development including additional software and security infrastructure in the UK. Salaries and compensation increased by $0.4 million or 5% compared to the nine months ended March 31, 2024 driven by increased stock-based compensation expenses. Fund operations increased by $0.4 million or 10% driven by increased costs associated with managing more funds. Partially offsetting these increased operating expenses was a decrease in marketing and advertising of $0.3 million or 13% as a result of prior year increased spending for new products at Original Sprout as well as from the Fintech app and new fund launches.

Previous wording

Total other income (expense), net decreased by $0.2 million or 125% for the six months ended December 31, 2024 compared to the same period in the prior year; however, the interest and dividend income line item increased by $0.9 million and other expense, net increased by $0.7 million. Included in the interest and dividend income for the six months ended December 31, 2024 was $1.1 million of dividend income from related party investments and offsetting that was $1.0 million in unrealized losses on related party investments included in other expense, net as a result of the reduction in the net asset values of the related party investments from the payment of the dividends.

Current wording

Total other income, net decreased by $0.6 million or 126% for the nine months ended March 31, 2025 compared to the same period in the prior year; however, the interest and dividend income line item increased by $0.7 million and other income (expense), net decreased by $0.6 million. Included in the interest and dividend income for the nine months ended March 31, 2025 was $1.1 million of dividend income from related party investments offset by $0.5 million in unrealized losses on related party investments included in other expense, net as a result of the reduction in the net asset values of the related party investments from the payment of the dividends. Interest expense increased by $0.7 million as a result of our recent note financing.

Previous wording

Benefit from income taxes increased by $0.3 million or 165% driven by the increase in the loss before income taxes for the reasons explained above.

Current wording

Benefit from income taxes increased by $0.4 million or 52% driven by the increase in the loss before income taxes for the reasons explained above.

Previous wording

Net loss increased by $0.6 million or 48% and was driven by decreased profits from our fund management business due to lower average AUM and increased losses from our financial services business as we continue to develop our Fintech app.

Current wording

Net loss increased by $2.1 million or 96% and was driven by decreased profits from our fund management business due to lower average AUM and increased interest expense as a result of the borrowing under our recent note financing.

Previous wording

Average AUM for the six months ended December 31, 2024 was $3.1 billion compared to $3.5 billion for the six months ended December 31, 2023. As a result of lower average AUM for the current six months when compared to the six months ended December 31, 2023, revenue decreased by $0.8 million or 8%. The decrease in average AUM in the six months ended December 31, 2024 was due to commodity price fluctuations and the high-interest rate environment, along with the impact of geopolitical and economic uncertainty.

Current wording

Average AUM for the nine months ended March 31, 2025 was $3.0 billion compared to $3.3 billion for the nine months ended March 31, 2024. As a result of lower average AUM for the current nine months when compared to the nine months ended March 31, 2024, revenue decreased by $1.1 million or 8%. The decrease in average AUM during the nine months ended March 31, 2025 was due to commodity price fluctuations, along with the impact of geopolitical and economic uncertainty.

Previous wording

Operating income decreased by $1.2 million or 40% driven by the decrease in average AUM as described above and increased fund operations expenses of $0.5 million or 21% as a result of increased sub-advisory and license fees, fund accounting and administration costs connected to new funds.

Current wording

Operating income decreased by $1.2 million or 31% driven by the decrease in average AUM as described above and increased fund operations expenses of $0.4 million as a result of increased sub-advisory and license fees, fund accounting and administration costs connected to new funds.

Previous wording

Total food products revenue decreased by $0.1 million or 4% for the six months ended December 31, 2024 as compared to 2023, which was the net result of an increase at our printing business of $0.1 million and a decrease at our bakery business of $0.3 million. The increase of $0.1 million or 9% in our printing business was due to the timing of job completion and invoicing as opposed to changes in the business climate. The decrease of $0.3 million or 12% at our bakery business was due to a temporary cancellation of certain product categories sold to national grocery chains that commenced in the current fiscal year.

Current wording

Total food products revenue decreased by $0.5 million or 9% for the nine months ended March 31, 2025 as compared to 2024, which was the net result of a decrease at our bakery business of $0.5 million. The decrease was due to a temporary cancellation of certain product categories sold to national grocery chains that commenced in the current fiscal year.

Previous wording

Operating income decreased by $0.2 million or 77% for the six months ended December 31, 2024 compared to the prior year period which was driven by a non-recurring cost of goods sold adjustment coupled with a depreciation charge taken for its solar electricity system and partially offset by increased profits from the sale of higher margin products at our bakery business.

Current wording

Operating income decreased by $0.1 million or 44% for the nine months ended March 31, 2025 compared to the prior year period which was driven by a non-recurring cost of goods sold adjustment coupled with a depreciation charge taken for its solar electricity system and partially offset by increased profits from the sale of higher margin products at our bakery business.

Previous wording

Revenue decreased by $0.2 million or 12% driven by the efforts to control the discounted price of products sold online by authorized resellers. This trend is expected to continue for the remainder of the current fiscal year as Original Sprout reduces the number of authorized Internet sales channels and repositions its products for a larger presence on store shelves.

Current wording

Revenue decreased by $0.4 million or 16% driven by the efforts to control the discounted price of products sold online by authorized resellers. This trend is expected to continue for the remainder of the current fiscal year as Original Sprout reduces the number of authorized Internet sales channels, recovers control over its price points, and repositions its products for a larger presence on store shelves.

Previous wording

Operating loss decreased by $0.2 million or 46% for the six months ended December 31, 2024 as compared to 2023 as a result of reduced marketing costs and a nominal price increase to domestic distributors.

Current wording

Operating loss decreased by $0.3 million or 42% for the nine months ended March 31, 2025 as compared to 2024 as a result of reduced marketing costs and the elimination of amortization charges from intangible assets from the impairment charge taken in June 2024.

Previous wording

Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the six months ended December 31, 2024 as compared to 2023. Revenue increased by $0.2 million or 13% and operating income increased by less than $0.1 million or 33% driven by increased sales to commercial customers. The larger commercial accounts generate more revenue and profit but take longer to complete, thus may produce spikes or declines in revenue and profits for specific reporting periods. As the residential consumer segment of the industry becomes more complex due to the bundling of services, including alarm monitoring, offered by larger telecom companies, we expect to focus even more heavily on the commercial and public facilities customers in the coming years.

Current wording

Revenues from monitoring residual fees remained relatively static while sales and installations of larger commercial installations increased for the nine months ended March 31, 2025 as compared to 2024. Revenue increased by $0.1 million or 4% and operating income was relatively flat at $0.3 million. The larger commercial accounts generate more revenue and profit but take longer to complete, thus may produce spikes or declines in revenue and profits for specific reporting periods. As the residential consumer segment of the industry becomes more complex due to the bundling of services, including alarm monitoring, offered by larger telecom companies, we expect to focus even more heavily on the commercial and public facilities customers in the coming years.

Previous wording

Marygold US incurred an operating loss of $3.0 million for both the six months ended December 31, 2024 and 2023. These losses and negative cash flows are expected to continue for the coming fiscal year.

Current wording

Marygold US incurred an operating loss of $4.2 million for both the nine months ended March 31, 2025 and 2024. As the app has earned only de minimis revenues since its launch in June 2023, the Company has decided to pause the offering and operating the app in the US and focus on launching the app in the UK instead. As such, the losses and negative cash flows from Marygold US are expected to be significantly reduced for the remainder of this fiscal year.

Previous wording

Our total Financial Services revenue, derived entirely from Marygold UK, for the six months ended December 31, 2024 increased by $0.2 million or 65% as compared to the six months ended December 31, 2023. The increase was primarily driven by the incremental revenue from Step-By-Step, which was acquired in April 2024. Operating loss increased by less than $0.3 million due to increased costs incurred in connection with the adoption and implementation of the Marygold mobile Fintech app for the U.K. market. The consolidated operating loss for financial services was $3.3 million for the current six months as compared to a loss of $3.0 million for the six months ended December 31, 2023.

Current wording

Our total Financial Services revenue, derived entirely from Marygold UK, for the nine months ended March 31, 2025 increased by $0.3 million or 67% as compared to the nine months ended March 31, 2024. The increase was driven by the incremental revenue from Step-By-Step, which was acquired in April 2024. Operating loss increased by $0.4 million due to increased costs incurred in connection with the adoption and implementation of the Marygold mobile Fintech app for the U.K. market. The consolidated operating loss for financial services was $4.8 million for the current nine months as compared to a loss of $4.4 million for the nine months ended March 31, 2024.

Previous wording

The Marygold Companies as a holding company has no significant revenue, however, it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE American listing fees and expenses, expenses related to compliance with its SEC periodic reporting requirements, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters increased by $0.6 million, or 30%, for the six months ended December 31, 2024 as compared to same period in 2023. The increased loss was driven by higher stock-based compensation expenses from additional outstanding equity grants during the six months ended December 31, 2024.

Current wording

The Marygold Companies as a holding company has no significant revenue, however, it does have operating expenses such as, but not limited to, salaries, audit and legal fees, NYSE American listing fees and expenses, expenses related to compliance with its SEC periodic reporting requirements, insurance, interest expense, and investor relations which produce operating losses. Operating loss for the corporate headquarters increased by $0.6 million, or 22%, for the nine months ended March 31, 2025 as compared to same period in 2024. The increased loss was driven by higher stock-based compensation expenses from additional outstanding equity grants during the nine months ended March 31, 2025 as well as higher general and administrative expenses including legal and accounting fees.

Previous wording

The Marygold Companies is a diversified holding company that conducts its individual business operations through its subsidiaries. At the holding-company level, its liquidity needs relate to operational expenses, the funding of additional business acquisitions and new investment opportunities. Our operating subsidiaries’ principal liquidity requirements arise from cash used in operating activities, debt service, and capital expenditures, including purchases of equipment and services, operating costs and expenses, and income taxes. Cash is managed at the holding company and the subsidiary level. There are generally no legal limitations or constraints on the movement of funds between the entities, however there are potential tax consequences for funds moved from foreign subsidiaries to the parent company. Additionally, our registered investment advisor subsidiaries are required to maintain certain minimum capital requirements.

Current wording

We are a holding company that conducts our individual diversified business operations through our wholly-owned subsidiaries. At the holding-company level, our liquidity needs relate to operational expenses, the funding of additional business acquisitions and new investment opportunities including the investment by our fund management business in the development of new exchange traded fund or products. Our operating subsidiaries’ principal liquidity requirements arise from cash used in operating activities, debt service, and capital expenditures, including purchases of equipment and services, operating costs and expenses, and income taxes. Cash is managed at the holding company and the subsidiary level. There are generally no legal limitations or constraints on the movement of funds between the entities, however there are potential tax consequences for funds moved from foreign subsidiaries to the parent company. Additionally, our registered investment advisor subsidiaries are required to maintain certain minimum capital requirements.

Previous wording

As of December 31, 2024, we had $5.7 million of cash and cash equivalents on a consolidated basis as compared to $5.5 million as of June 30, 2024, a increase of $0.2 million or 4%. Our cash used in operating activities for the six months ended December 31, 2024 was $1.7 million. For the six months ended December 31, 2024, the Company made additional expenditures of $2.7 million with regard to the development of our mobile Fintech app. We have invested a total of $18 million in the Fintech app since Marygold’s inception. In September 2024, we entered into a financing arrangement under which we borrowed $4.4 million and have the potential to borrow an additional $2.2 million. The financing arrangement also gives the lender the right but not the obligation to provide an additional $10.0 million in financing to us on the same terms as the initial loans. We expect that we will require additional financing to fund our fintech operations over the coming 12 months. As the funding requirements become known, we will decide upon the source of the additional capital. Despite these cash investments and expenses, our working capital position remains strong at $14.4 million as of December 31, 2024.

Current wording

As described below, in September 2024, we entered into a financing arrangement under which we borrowed $4.4 million and have the potential to borrow an additional $2.2 million. The financing arrangement also gives the lender the right but not the obligation to provide an additional $10.0 million in financing to us on the same terms as the initial loans. We expect that we will require additional financing to fund our fintech operations over the coming 12 months. As the funding requirements become known, we will decide upon the source of the additional capital. Despite these cash investments and expenses, our working capital position remains strong at $13.8 million as of March 31, 2025. Also as described below, on January 28, 2025, we received $1.8 million in net proceeds from the sale of our shares in a firm commitment underwritten offering.

Previous wording

On January 28, 2025, we closed on the sale of an aggregate of 2,050,000 shares of our common stock, $0.001 par value per share (“Common Stock”) at a price to the public of $1.10 per share (before deduction of underwriting discounts and commissions) in a firm commitment underwritten public offering (“Offering”) pursuant to an underwriting agreement, dated January 26, 2025 (“Underwriting Agreement”), between us and the Maxim Group LLC (“Maxim”), as sole underwriter and book-running manager for the Offering. Pursuant to the Underwriting Agreement, we granted Maxim a 45-day option to purchase up to an additional 307,500 shares of Common Stock at the public offering price before deduction of underwriting discounts and commissions (“Overallotment Option”). As of the date of this Report, Maxim has not exercised its Overallotment Option and there can be no assurance that it will do so.

Current wording

On January 28, 2025, we closed on the sale of an aggregate of 2,050,000 shares of our common stock, $0.001 par value per share (“Common Stock”) at a price to the public of $1.10 per share (before deduction of underwriting discounts and commissions) in a firm commitment underwritten public offering (“Offering”) pursuant to an underwriting agreement, dated January 26, 2025 (“Underwriting Agreement”), between us and the Maxim Group LLC (“Maxim”), as sole underwriter and book-running manager for the Offering. Pursuant to the Underwriting Agreement, we granted Maxim a 45-day option to purchase up to an additional 307,500 shares of Common Stock at the public offering price before deduction of underwriting discounts and commissions (“Overallotment Option”). Maxim did not exercise its Overallotment Option.

Previous wording

The net proceeds of the Offering to us, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $1,850,000. We intend to use the net proceeds from the Offering to retire or reduce debt, make additional investments in our financial services operations, and for other general working capital and corporate purposes.

Current wording

The net proceeds of the Offering to us, after deducting underwriting discounts and commissions and estimated offering expenses, were $1.8 million. We intend to use the net proceeds from the Offering to retire or reduce debt, make additional investments in our financial services operations, and for other general working capital and corporate purposes.

Previous wording

Based on our current operating plan which we expect may include continued additional investments in our mobile Fintech app, we may need to raise additional funds through one or more debt and/or equity financing to meet our operating and cash needs. There can be no assurance we will be able to raise such additional financing or upon terms acceptable to us. In the event we are unable to obtain additional financing in an amount or upon terms acceptable to us, we expect to reduce or curtail our investment in the development of our Fintech app.

Current wording

The Company believes that its cash and cash equivalents along with the cash generated from ongoing operations will be sufficient to fund its cash requirements over the next 12 months. However, based on our current operating plan which we expect may include continued additional investments in our mobile Fintech app for the U.K. market, we may need to raise additional funds through one or more debt, equity or equity linked financings to meet our operating and cash needs. There can be no assurance we will be able to raise such additional financing upon terms acceptable to us or at all. In the event we are unable to obtain additional financing in an amount or upon terms acceptable to us, we expect to further reduce or curtail our investment in the development of our Fintech app.

Previous wording

The Company has various leases for offices, warehouses and manufacturing facilities. The total amount due under these obligations was $1.4 million as of December 31, 2024. During the six months ended December 31, 2024, the Company renewed leases in New Zealand and the US which increased the right-of-use assets and lease liabilities by $0.7 million. The obligations will reduce over the passage of time through periodic lease payments. See Note 10 for further analysis of this obligation.

Current wording

The Company has various leases for offices, warehouses and manufacturing facilities. The total amount due under these obligations was $1.3 million as of March 31, 2025. During the nine months ended March 31, 2025, the Company renewed leases in New Zealand and the US which increased the right-of-use assets and lease liabilities by $0.7 million. The obligations will reduce over the passage of time through periodic lease payments. See Note 10 for further analysis of this obligation.

Previous wording

As of December 31, 2024, the note payable balance outstanding, net of the original issue discount and fees paid, was $3.9 million, of which $3.5 million is due within 12 months from December 31, 2024 and the remaining balance of $0.4 million is due prior to September 30, 2026. The effective interest rate for this note is 41.3%.

Current wording

As of March 31, 2025, the note payable balance outstanding, net of the original issue discount and fees paid, was $3.7 million, all of which is due within 12 months from March 31, 2025 assuming no deferral rights are exercised. The effective interest rate for this note is 41.3%.

Previous wording

USCF Investments, from time to time, provides initial investments in the creation of ETP funds that USCF Investments manages. USCF Investments classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. As of December 31, 2024, USCF Investments held investment positions in four of its 40 Act funds, USG (ticker changed from GLDX in March 2024), ZSB, USE and ZSC of $1.5 million, $0.2 million, $2.4 million, and $2.1 million, respectively. These investment positions along with other investments, as applicable, are described further in Note 5 to our Financial Statements.

Current wording

USCF Investments, from time to time, provides initial investments in the creation of ETP funds that USCF Investments manages. USCF Investments classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. As of March 31, 2025, USCF Investments held investment positions in four of its exchange traded funds registered under the Investment Company Act of 1940, as amended, USG (ticker changed from GLDX in March 2024), ZSB, USE and ZSC of $1.7 million, $0.2 million, $2.5 million, and $2.1 million, respectively. These investment positions along with other investments, as applicable, are described further in Note 5 to our Financial Statements.